NEW YORK (TheStreet) -- Johnson Controls (NYSE:JCI) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that JCI's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
- JOHNSON CONTROLS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, JOHNSON CONTROLS INC reported lower earnings of $1.79 versus $2.36 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $1.79).
- JCI, with its decline in revenue, slightly underperformed the industry average of 8.2%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has decreased to $217.00 million or 10.69% when compared to the same quarter last year. Despite a decrease in cash flow JOHNSON CONTROLS INC is still fairing well by exceeding its industry average cash flow growth rate of -28.43%.
--Written by a member of TheStreet Ratings Staff.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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